Chainlink Price Rare Pattern Points To A 35% Crash

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As a seasoned analyst with over two decades of experience in the cryptocurrency market, I have seen my fair share of bull runs and bear markets. The current downtrend in Chainlink (LINK) is a stark reminder of the volatile nature of this nascent industry.

Looking at the 4H chart, the Head-and-Shoulders (H&S) pattern and the Death Cross formation are clear signs that LINK may plummet further. The potential drop to $13.25, calculated from the distance between the head and neckline, is a sobering prospect for any investor. However, as always, the market can be unpredictable, and a move above the major S&R pivot point at $25 could potentially invalidate this bearish forecast.

The retreat of other DeFi tokens and the declining Total Value Secured in the Chainlink network are concerning indicators. However, I have learned over the years that the crypto market can be like a rollercoaster ride – it’s all about when to hold on tight and when to let go.

In conclusion, while the data points towards a potential downtrend, I always remind myself that even the most bearish of markets eventually turn bullish. As they say in the world of crypto, “the only thing permanent about crypto is its volatility.” So, let’s see where the ride takes us next!

And on a lighter note, remember folks, never invest more than you can afford to lose – unless you’re trying to win a game of Crypto Roulette!

The price of Chainlink (LINK) has plummeted significantly this month, and a scarcely seen chart configuration suggests further declines as we approach 2025. Despite its robust underlying qualities, LINK has dropped by approximately 35% from its December peaks, echoing the trend of Bitcoin and other digital currencies.

Chainlink Price Analysis: H&S Points To More Downside

As an analyst, I’ve noticed that my analysis of the 4H chart indicates a significant rally in the LINK price, peaking at $31 in December, coinciding with the surge of Bitcoin and other altcoins. Currently, it appears to have formed a head-and-shoulders chart pattern and is holding steady near its neckline.

A Head and Shoulders (H&S) pattern refers to a commonly used reversal indicator, which consists of three points: a head (highest point), two shoulders (lower points on either side), and a neckline connecting these lower points. In this context, the ‘head’ was priced at $31, while both ‘shoulders’ were approximately at the 23.6% Fibonacci Retracement level, or $26.10. The ‘neckline’ of this pattern is situated at the 50% retracement point and coincides with a feeble, sell-and-reverse signal as per the Murrey Math Lines.

On December 22, the Chainlink price experienced a death cross, meaning that its 200-day and 50-day Weighted Moving Averages (WMA) switched positions. Furthermore, the Percentage Price Oscillator (PPO), similar to the MACD indicator but with unique features, has now dipped below the zero line and is trending downward.

Consequently, these trends suggest a significant decrease in value within the upcoming days. The gap between the peak (head) and the support (neck) amounts to approximately 35%. This same distance from the current level implies a potential plunge in the stock price down to $13.25.

Instead, if the price of LINK surpasses the significant resistance level at $25, which aligns with the right shoulder, it would contradict our current forecast. This upward movement would instead support the gradual development of a falling wedge formation that began on December 24. The falling wedge is often seen as a bullish reversal pattern.

LINK Falls As Total Value Secured Slips

The decrease in Chainlink’s price appears to be happening simultaneously with the decline of other DeFi tokens such as AAVE, Uniswap, and Compound.

Concurrently, information about ecosystems indicates that the overall value locked within the network has been decreasing over the past few days. It reached a high of $41 billion earlier this month before falling to $35 billion. Many networks in its environment, such as Spark, Eigenpie, AAVE V2, and GMX, have experienced a decrease in assets.

In the previous fortnight, data from IntoTheBlock indicates a decline in Chainlink’s open interest in the futures market. On December 30th, the interest level was $1.48 billion, down from the month’s peak of $2.8 billion, suggesting reduced demand for Chainlink in the futures market.

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2024-12-31 14:58